Mr. McGuire: Endurance Specialty Holdings is a Bermuda-based publicly traded insurer and reinsurer, committed to generating above average long-term returns on capital. Endurance was formed very shortly after the tragedy of September 11, 2001, which at that time, was the largest insured loss in the history of the property and casualty insurance industry. The events of September 11 by itself had a profound impact on the insurance industry. However, when combined with the effects of loss emergence from legacy issues including asbestos and environmental claims, several years of inadequate casualty pricing, and a period of very poor investment performance, the collective balance sheet of the industry was significantly impaired. We recognized that the industry was in a period of dislocation with significantly reduced capital that resulted in the withdrawal of many incumbent carriers from key markets at a time when pricing, terms, and conditions were improving rather dramatically. The pricing environment was quite attractive and, in our view, was something that would be sustainable over a meaningful period of time. The opportunities were significant, and in order to seize them, we had to be nimble. In about three weeks time, we raised over 1 billion of capital, we opened for business and we began putting the pieces together to create what Endurance is today. We started as a Bermuda company. The regulatory regime in Bermuda allowed for quick formation, and enabled us to get up and running very quickly. As Bermuda is also a center of excellence for certain insurance and reinsurance markets, we were able to recruit highly qualified personnel and establish a solid operating infrastructure rather quickly. In a matter of a weeks, we had our insurance licenses, initial staffing and our business was up and running. Although we started as a Bermuda company, we also knew that to be a truly global player in the insurance and reinsurance markets, we had to be in the major insurance markets of the world. In addition to Bermuda, we have now established fully licensed and staffed insurance and reinsurance operations in both the US and the UK. In our early days, we were dominantly a reinsurer, as our early growth was fueled by several renewal rights transactions where we were able to acquire attractive reinsurance books of business without legacy exposure. We have supplemented our reinsurance growth with the continual build up of our global insurance capabilities in Bermuda, the United Kingdom and most recently in the US. We are now in the latter stages of the build-out of our direct insurance operation in the US where we are seeing great opportunities, particularly in catastrophe exposed property lines. Although our business is still weighted to reinsurance, our portfolio is extremely well diversified in the global property, casualty and specialty markets, and we are experiencing great momentum in our insurance units. As I look back over the first four and a half years, what we are now is very consistent with our early vision. At our inception, we had envisioned a very broad-based business model that was focused on both property and casualty risks as both an insurer and reinsurer, and we are largely there today. We have the platform to deliver 15% plus returns on equity over the market cycles.
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